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Insurance Funds Resisting Merger

Three years after Iran’s Health Insurance Organization was established to merge insurance firms across Iran, insurance funds, including Iran’s Social Security Organization (SSO), still resist merger despite all the deadlines imposed by the country’s parliament.

Based on the Article 38 of the Fifth Five-year Economic Development Plan (2011-2015), different insurance companies are required to merge into one centralized institution so that all the insured citizens could benefit from the same health services.

SSO Resistance
Some insurance companies charge customers higher premiums and they oppose the proposed merger, giving tenuous justifications for their resistance.
That is while experts believe such a merger is neither to the detriment of people nor the insurance companies, as the SSO, for instance, would enter into a contract with the Health Insurance Organization and would receive the whole franchise. But the problem is that SSO is not satisfied with the current offering of franchises.

Nine months ago, the Supreme Insurance Council imposed a 6-month deadline for the insurance companies to prepare the ground and provide the infrastructure for the large scale merger. But the insurance companies once more missed the deadline, despite the comments made by the Health Insurance Organization which said no organization or company may refuse the merger.

Turkey: An Ideal Model
The ministry of cooperatives, labor, and social welfare (the SSO parent) has time and again announced that the insurance merger is a law and all the parties must obey that.
Despite all the emphases placed by the government for the implementation of the law, such a historical merger seems to be unworkable under the current circumstances unless countries, like Turkey, with experience in merging the insurance companies and funds, are used as models.
The social security system in Turkey went through a major transformation in 2007, resulting in a more efficient and fast functioning system, based on centralizing the control of different social security funds into single institution.
The country’s three major insurance funds together cover around 81% of the population as of 2008.